More sales in December than in April?

biggest % price increase in 37 years in 2020

…but of course!  It’s 2020.
Ottawa real estate ended this unusual year with a very strong December.  Monthly sales leaped 32.4% in Dec 2020 vs the same month in 2019.  While December and January are typically the two lowest sales months of the year ; the sales recorded in December of 1,002 actually outstripped April where only 913 total properties were sold.  April is normally the 3rd busiest sales month (after May #1 and June #2)  but the arrival of the pandemic in March really put a damper on April sales this year. Sales decreased in April 2020 by 55% vs 2019.

Price increases largest in almost 40 years:
One has to go all the way back to 1983 to find a year with larger % price increases than our market has seen this year.  On a year to date basis, residential properties average selling prices averaged $582,267 up 20% vs last year and condos sold for $361,337, up 19%.  In 1983, a 21.3% price jump moved the average selling price from $71,080 to $86,245.

Super low listing inventory and mortgage rates helped fuel these price increases, plus we believe there has been an increase in out of town buyers, from other major centres.

Listing inventory: the cupboard is still pretty bare:
Though the number of new listings has been increasing for a few months, the sales demand is absorbing those easily on the residential side, where the number of available properties is 59.2% lower than a year ago, suggesting there is no letup in sight for bidding wars and above average price increases,  The condo market is in slightly better position for buyers, as we end the year with 26.6% more listings than we did a year ago.

Unit sales increases not staggering for total year:
With a strong 2nd half of the year, we finally recovered the big decreases in April (-55%)  and May (-44%) in unit sales and ended the year with total residential unit sales up by 3% for the year, while condo sales were 1.5% lower than 2019.

What will 2021 bring?
Royal Lepage is predicting that Ottawa will continue with solid average sales increases of 11.5%, while Re/Max sees more moderate price growth of 7%, so stay tuned!

Gord McCormick, Broker of Record
Dawn Davey, Broker
613-435-4692 oasisrealty@rogers.com
www.oasisrealtyottawa.com 

Are we seeing a market shift in Ottawa?

Are these key indicators suggesting a market shift in Ottawa real estate?

Will we look back at the fall of 2020 and say:  “yes, we can see the beginning of the market change in the results posted in September and October?

New listings surge in October:
For the 3rd straight month, new listings continue to increase significantly, compared to a year ago.  Fortunately, unit sales increases have mostly absorbed these new listings and our sellers’ market continues, as does historically strong price increases.

New listings for residential properties were up 47.9% vs last year in the month of October, though were slightly less than the number of new listings recorded in September, so the typical seasonal easing pattern seems to be taking place.  New listings were up 18.4% in August and 31.8% in September.

Condos on the other hand, registered an increase of 69.8% in new listings in October after posting 45.3% and 41.4% gains in the previous two months.

Listing inventory at month end:
The total of residential listings available for sale is 45.7% lower than a year ago and represents approximately only one month of expected sales, which is still very low.  A more typical balanced market would have us with something like 2.5 to 3.5 months of expected sales on hand.

The number of condo units available to start November are 15.4% higher than a year ago, and equate to approximately 1.5 to 2 months of expected sales.

The most surprising stat of all:
With all the recent history of bidding wars and rapidly escalating prices, one would expect that we have had a runway year in total sales…. but guess what?  Though we have registered some strong unit sales increases in the last couple of months, the year to date numbers may surprise many.  The total number of residential sales sold* via MLS® shows that we are dead even with the same point in 2019.  The number of condos sold year-to-date through October is 5% lower than last year.

Why is this?

We had a major sales drop in two of our 3 biggest sales months in April (down 55%) and May (down 44%) at the start of the pandemic and have gradually made up that shortfall.

Also, we believe that a slightly larger number of properties are being sold “off market” by exclusive listings and other private or FSBO, sales that do not get captured in MLS™® stats published by the Ottawa Real Estate Board. (OREB)  While these types of transactions have always occurred, we believe the % may have ticked up, due to the scarcity of listings and the desire for some sellers to avoid the volume of visitors generated by an MLS® listing, during the pandemic.

Sales to new listing ratio still indicate sellers’ market:
This ratio is used to roughly approximate the overall market, as being either a “sellers’, “buyers’ or “balanced” market.

A sellers’ market is said to be occurring when the ratio exceeds 60%.

If the ratio is between 40% and 60%, we are experiencing a “balanced” market with a roughly equal number of buyers and sellers.

If the ratio is below 40%, then we are in a buyers’ market, with more sellers than buyers.

Our current ratio based on October 2020 sales in Ottawa shows the following:

Residential sales: 85.9% sales to new listings

Condos: 67.9%

So both are still showing sellers’ market conditions, though condos are slipping closer to a more balanced market, which favours neither buyers nor sellers.

What’s ahead?
Sales typically start to ease in mid-November, as our seasonal pattern shows that December and January are the two slowest sales months of the year…but it’s 2020…so who knows?  We still have a strong sellers’ market for residential properties, while condo sales seem to be trending towards a more balanced market.  Both buyers and sellers will want to keep a close on market trends and new construction buyers, especially will want to assess their risk tolerance for purchases that will not conclude until late 2021 or even in to 2022.

Are prices going to drop?

The economic fallout from the pandemic, has yet to drastically intervene in the real estate market (though there are signs in the condo market, especially in Toronto) , other than to drive mortgage rates down, which has only further fuelled demand.  One has to believe our significant price increase percentages will have to slow eventually, as we are on a pace of home price inflation not seen since 1983.  Year to date average prices are up 19.4% for both residential properties and condos this year.

Keeping a close eye on the supply and demand factors (sales, new listings, overall listing inventory) will help gauge whether we are seeing a distinct market trend which may balance supply and moderate price increases or in the extreme case, where supply grows significantly and outstrips demand which then results in downward or at least flattening of prices.

Our market tends to be buffered from the larger ups and downs in prices, experienced by some other cities and if fact, we have only seen an annual price decrease 5 times since 1956 and the largest of those was only 4.3%, way back in 1961 and the other years were in the 1-2% range.

Make sure to check all your assumptions with up to date market data, before completing  a buying or selling plan and your Realtor is your best source for both data and front line day to day experience in the market.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692 or mobile 613-371-9691
oasisrealty@rogers.com
www.oasisrealtyottawa.com
https://www.facebook.com/oasisrealtyottawa
@OasisrealtyOTT

http://blog.oasisrealtyottawacom/

Ottawa average residential selling price approaches $600,000 during August

residential average sale price jumps 22%…how long can this continue?

Ottawa’s market continued red hot through August with the average selling price of residential properties during the month rising 22% from a year ago to $592,548.  Residential sales recorded a 21.8% increase in transactions, while condo sales grew at just over 2% but recorded at 24% increase in average selling price to $383,640.

Some good news on new listings….but…
We had our strongest month of the year for new residential listings which grew 18.6% vs 2019 but alas, residential sales growth pretty well absorbed all those new listings.
New condo listings for the month were also up 41.4% for the month.

Month end inventory still scarce for buyers:
At month end, we still have a huge deficit with residential properties down 49.8% vs August 2019 and the number of condos available for sale down 17.6%.  Though each grew slightly from the figures posted at the end of July this year.
The only significantly growing month end inventory area is rentals which were up 31.6% vs a year ago.

Key performance indicator:  sales to new listings ratio
This metric compares the number of new listings during the month to sales.  In August 2020 this ratio came in at a super high 83.2% for residential properties and 72.5% for condos.  A balanced market would see this ratio in the 40-60% range.  By comparison, the Toronto Real Estate Board, reported a sales to new listings ratio of 58% and with a surge of new listings of 56.8%.

Do I buy? Do I sell?  Do I wait?
Tough conundrum on many levels for those considering a move in real estate.  Will the economy worsen?  What factors am I risking by buying or not?  Will prices ease, if the economy softens or will government spending and support programs keep the economy rolling and with cheap mortgage money and scarce inventory of housing, the average house has been going up some $20,000 per quarter in 2020.  Am I a fool to miss out on this market?

Aug 2017 vs Aug 2020 pricing snapshot:
Can you believe that the average residential selling price in Ottawa only 3 years ago during August was $420,337.  This means average selling prices have grown 40.9% over just 3 years when comparing this August 2017 figure to our current month which saw an average residential selling price of $592,548.

Still room to grow?
This seems super high by Ottawa standards but when one compares it to Toronto at $951,404 and Vancouver at $1,038,700, our prices still seem to offer pretty good value.  Our blended average price, once condos are added is $542,872 during August

 

No one has a crystal ball?
We all wish we could accurately predict where this market is headed and it could certainly take some widely divergent directions.  While one intuitively, cannot see these kind of price increases continuing, our market is still growing and our price levels are still significantly lower than major centres.

Taxes:

We do not yet have the Municipal Land Transfer Tax (MLTT) or the Foreign Buyer Tax or vacant property tax, so that makes our market attractive for foreign investors.  There is some concern that immigration may stall with COVID and limited housing requirements for new Canadians or those with visas coming to study or work here.
Will the Federal Government follow through with the rumoured capital gains tax on (some?) residential home sales?

New government in town?
Government action (or lack thereof) can have a profound effect on housing and our Ottawa market is even more reliant on government activity than other markets.  If the current Federal government minority continues with its social aggressive benefit plans and other spending, our market should continue to rock and roll.  We believe that for every government headcount added, at least one more job or full time equivalent is added in the private sector.  Should a sea change on spending occur at the Federal level due to political pressure or a change in government, then one might expect some kind of budget tightening exercise which could impact Federal headcount and program funds.  Every headcount lost also has a ripple effect in the Ottawa economy, too and further dampen market outlook.

On the surface, the current Liberal-NDP coalition seems likely to likely to continue which probably means good news for Ottawa real estate.  But as the 1990’s demonstrated in spades, even Liberal governments have to wield a budget axe, if sufficient political and market pressure is applied and that is another scenario we would prefer not to encounter again.

Even if our market plateaus or flattens, Ottawa is still a very safe and reliable real estate market.  Prices tend to be “sticky” (i.e they don’t drop that much, regardless of market conditions)  What tends to happen is that the whole market simply stagnates, demand dries up and the number of sales transactions drop, should economic or job uncertainties appear to be greater or banks or governments tighten lending practices.

Buyers and sellers will have to assess a lot of factors in making their decisions and Realtors are here to help with the most up to date statistics that can help make better long term decisions.  The key stats to follow are the sales to new listings ratio and the overall listing inventory, as these will often signal a swing in market supply and demand factors.

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage 
613-435-4692 or 613-371-9691
 oasisrealty@rogers.com

Average home prices up $25,000-$40,000 through November 2019

a wintry November did not slow sales

The Ottawa Real Estate Board (OREB) results for November show another strong sales month, despite the early onset of wintry conditions. Unit sales and average home prices both approached double digit gains, compared to November 2018.  The market shows no trends of flattening out, except for the usual seasonal fluctuations.

Key average price milestones reached this year:
The average detached home price has sold this year for $510,975, an increase of 8.4% or $39,693, breaching the $500K mark for the first time.
The average residential row townhome has sold for $408,905, an increase of 9.8% or $36,620, topping $400K.
The average residential semi-detached home has sold for $489,656 an increase of 9.5%. or $42,447
The average condo sold this year has topped $300,000, coming in with a 9.1% price increase to 303,817 which is up $25,459 from a year ago.  Apartment condos lead the way with an average price of $324,459 up 5.7% while row units and stacked condos also showing similar $ price gains at $268,613 and $274,860 respectively.

Listing inventory continues to languish:
The number of new listings in November are pretty flat with a year ago, so while they are not getting any worse, they are not improving, either.  This means our supply/demand imbalance should continue for the short term, at least-given the strong sales demand.

At the end of November, our residential listing inventory was 22.6% lower than last year at the same time and condo listing inventory was 43.9% lower.

About the only listing category that was higher was the number of rentals that are MLS® listed, which are up 53.9% vs 2018.  Year to date rentals done via MLS® are basically flat vs last year, so that category is not seeing the same growth as the resale market.

City policy on short term rentals may put more inventory in the market:
Though there will no doubt be ongoing appeal action via OMB or other legal avenues, there could be a slight bump in available listing inventory and long term rental properties, from investors losing their ability to rent their (non resident occupied) properties via Airbnb or VRBO.  Numbers are not readily available of how many housing units fall in this category but this could have help the condo and urban market inventory where most of the short term rental properties are located.  Airbnb totalled some 4,600 listings in Ottawa over the last 12 months, so the number of investors involved might easily be 500-1,000 (or more) which would be welcome in the long term rental or resale markets.  Stay tuned!

New home construction:
New home sales continue to flourish and with the upward trajectory in the market, many new home buyers feel they are kind of “doubling down”, in that both their current home and the one “on order” or “to be built” are appreciating in price, while they wait for the new home possession which typically is 8-12 months or more, down the road.

Cost of waiting makes buying even more expensive:
Strong markets like this make it tough on all buyers, particularly first time buyers and those that are “fence sitters”, who are considering a move but don’t really have a compelling reason to do so, until they find the “right” property.  The upward price trajectory, however, makes the cost of waiting potentially significant.  For example, even if current prices only increase by 6% over the next months (a Re/Max projection for Ottawa), the average prices overall could look something like this:
The average detached single home will jump to $541,633 and a further hike of $30,000+ over current prices.

The average two storey single detached home could top $600,000 next year, with a 6% hike from this years’ average price of $567,456.

The average townhome would jump to $433,439 up $25,534

The average condo would increase to $322,026 overall and the average apartment condo to $343,926, each up almost $20K.

This means more down payment needed to qualify for appropriate financing, more to generate 20%+ down payment for investment properties, higher land transfer and mortgage insurance costs and a longer period to pay off mortgages taken out against these purchases.

These also represent only “average” price increases and higher priced properties could easily be going for $50-$100K more in the immediately foreseeable future, especially, if the current inventory shortage continues and the market generates another 8-10% price rise.

Gord McCormick, Broker of Record
Principal Broker, Ottawa Real Estate Board
Dawn Davey, Broker
Oasis Realty Brokerage
613-435-4692  oasisrealty@rogers.com
www.oasisrealtyottawa.com

Stittsville real estate soaring through October 2019

Stittsville real estate outpaces market in 2019

Stittsville has experienced a building and population boom in recent years and is now approaching 35,000 inhabitants.  Quite a leap from being “just beyond the fringe” that was a popular radio commercial tagline back when Stittsville was a quiet village removed from both urban and suburban Ottawa with a population of 3,000 or so.  In fact, when combined with Kanata, the area has the largest population and number of residences in the Ottawa metro area and is the fastest growing.  Stittsville is projected to have close to 60,000 residents within the next decade!  So with all the new construction going on, it is no surprise that real estate has made strong gains in 2019.

This year’s residential numbers:
We are using the residential resale numbers for the 3 main Stittsville MLS® zones, though October 2019.(does not include any condo sales)

Stittsville North MLS® zone 8211 for sales north of Hazeldean Rd

Stittsville Central MLS® zone 8202 for properties between Hazeldean Rd and Abbott St.
Stittsville South MLS® zone 8203 for properties south of Abbott St.

For comparison purposes, the Ottawa MLS® as a whole has recorded sales increases of 3.8% in unit sales and an average selling price increase of 8.4% for residential properties to a price of $484,891.

North Stittsville (8211) is rocking!
This area closest to highway 417 has had and continues to have growth and new construction with a good variety of residential housing to cover many price points.  It also offers best access for commuters who rely on the 417 for commuting purposes.

Unit sales are up a strong 20.1% this year and the average selling price is up 11.9% to $473,866

Central Stittsville (8202) sees strong price growth but inventory limits unit sales:
Unit sales in Central Stittsville are actually down this year by 3.2%, perhaps reflecting the lack of listing inventory available.  Still, good demand has pushed the average price in this area up 13.6% to $552,472.

South Stittsville (8203) unit sales up 7.1% and the average price sold this year is $579,098, up 8%.
Most of these unit sales are resale homes and we have no visibility in to the numbers of new homes being sold in Stittsville but it is obviously significant at the present time, with most of this growth in the eastern section of Central Stittsville and in South Stittsville.

Outlook for 2020:
Expect to see continuing sales  and price growth as all the fundamentals continue to look good with the local economy and the pace and range of new home construction in the area is significant and pretty compelling for a lot of homebuyers, who may also feel that they should buy now, before prices escalate any further.  Those who have existing homes to sell then of course, offer that existing property for sale to co-ordinate with the new home possession date.

So it should continue to be “all systems go!  For Stittsville real estate in 2020.

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage Ottawa, Canada   613-435-4692
oasisrealty@rogers.com   www.oasisrealtyottawa.com

 

 

 

Ottawa market continues strong through October 2019

Sun continues to shine on October sales in Ottawa

The Ottawa real estate market just keeps rolling along, with another double digit sales increase recorded in the month of October and continuing listing inventory shortages, with less than 2 months of anticipated sales currently on the market.

Residential unit sales for the month were 16.9% more than October 2018 and the number of condos sold was up 23% during the month.

Monthly average selling prices upward bound:
The average selling price of a residential property during October was $483,405 an increase of 7.6% over last year and the average condo sold for $319,208 which was up 18.3%.  On a year to date basis, the average residential price is up 8.3% and the average condo is up 9.1%

Listing inventory continues to slide:
Residential listings are down 22.3% vs last year at the same time and condo listing inventory is down a significant 38.8%.  New listings are not taking up the slack and are pretty flat vs last year, so our increasing sales continue to chew through available listing inventory.

Our number of listings currently available, is less than 1 per Realtor member of the Board.

36% of homes selling above asking:
This is a great new stat the Board is tracking and providing, so members and consumers are aware of the real degree of multiple offers.  So while it is quite common, it is not happening for every listing.  The Board noted in its release that in Oct 2018, only 21% of homes sold were sold above listing price, so our continuing inventory shortages are creating more competitive offer activity, although it should also be mentioned that a high % of listings are holding back offers, which can create a multiple offer situation.

Election fallout?
With the minority Federal government coming out of the election, it is highly unlikely the local economy will suffer, as both the Libs and NDP try to out-left one another, which only means more program money and staffing in the National Capital Region.  So our local economy should continue to be quite healthy for the duration of the minority government.

Recent job numbers:
Ottawa’s unemployment rate dropped to 4.2% in October, the lowest it has been since 2007, yet another positive indication that the bull market in real estate should continue in the short to intermediate term, those planning a move may consider acting on their plans, as that home under consideration may well cost $30 or $40K more next year.

Normally the start of hibernation period…but perhaps not this year?
Mid November is normally when real estate activity eases seasonally and troughs out for 90 days or so, until we get through the worst of winter and then things get brighter and more active mid-February on.  This market, however, should continue to post gains, though the seasonal slump should still occur as usual.

We are working hard to ramp up our blog and are happy to be added to a National list of real estate blogs which you can check out here: https://blog.feedspot.com/canada_real_estate_blogs/

 

Gord McCormick, Broker of Record
Dawn Davey, Broker
Oasis Realty Brokerage 613-435-4692